Sandoz v. Amgen: Biosimilar Act Disclosure Obligations Not Enforceable by Injunction— Anywhere

Lynn C. Tyler

Why These Two Cases Made the List

The Supreme Court’s first encounter with the Biologics Price Competition and Innovation Act (BPCIA) came last year in Sandoz, Inc. v. Amgen, Inc.1 The BPCIA was enacted in 2009 as part of the Patient Protection and Affordable Care Act, a/k/a ObamaCare, and created a regulatory pathway for the approval of “biosimilars,” biologic medicines that are highly similar to previously approved biologics. It has been estimated that biosimilars will save consumers, including the federal government, billions of dollars over the next ten years. The BPCIA also includes an elaborate (but ambiguous) set of provisions governing litigation of patent disputes related to biologics and two of them were the subject of the Supreme Court’s decision and a decision by the Federal Circuit on remand.


Statutory Background

Some background on the BPCIA is helpful to understand the issues in the cases. The BPCIA’s litigation provisions are known as the “patent dance” because they set forth several steps in which owners of an original biologics license application (BLA), called “reference product sponsors” (sponsor) in the BPCIA, and biosimilar applicants (applicants) can engage before commencing any patent infringement litigation.2 The dance begins when the applicant submits an application to FDA for approval of a biosimilar drug. The statute states that “[w]hen a subsection (k) applicant submits an application” to FDA, the applicant “shall” give a copy of the application to one in-house lawyer for the sponsor and to outside counsel for the sponsor, subject to certain confidentiality restrictions. Later, the statute states that the copy of the application “shall” be provided to the sponsor “[n]ot later than 20 days after the Secretary [through the FDA] notifies the subsection (k) applicant that the application has been accepted for review.” In addition, at that point the applicant “shall” also provide “such other information that describes the process or processes used to manufacture the biological product that is the subject of the application.”

The next step is that, within 60 days after the receipt of the application and manufacturing process information, the sponsor must provide the applicant with a list of patents which the sponsor believes “could reasonably be asserted” and identify any that are available for license. Sixty days after receiving the sponsor’s list of patents, the applicant must provide the sponsor with (1) its own list of patents that it believes could be asserted, and either (2) a detailed statement, on a claim by claim basis, of the factual and legal basis why each patent on the sponsor’s and applicant’s (if any) list(s) is invalid, unenforceable, or would not be infringed, or (3) a statement that the applicant does not intend to market the product before the patent expires. These lists are referred to as “Paragraph 3” lists based on their position in the statute. The applicant must also provide a response to the sponsor’s indication of patents that are available for license. The final step in this phase is that, within 60 days of receiving the applicant’s detailed statement, the sponsor must provide its own detailed statement, again on a claim by claim basis, of the factual and legal basis why each patent will be infringed and a response to the applicant’s statement on validity and enforceability.

After providing a relatively brief period for the parties to agree on patents to be litigated, if the parties cannot agree, the statute goes on to prescribe another set of steps in the pre-litigation dance. The first of these is that the applicant notifies the sponsor of the number of patents the applicant will include on a list of patents to be litigated. Five days later, the parties simultaneously exchange lists (referred to as “Paragraph 5 lists”) of patents that each believes “should be the subject of an action for patent infringement.” The number of patents on the sponsor’s list cannot exceed the number on the applicant’s list, unless the applicant’s list does not include any patents, in which case the sponsor can list one patent. Whether the parties agreed on a list of patents to be litigated or exchanged lists, within thirty days of completing the applicable process the sponsor must file an infringement suit. If the parties agreed on patents to be included, the sponsor’s suit must include those patents. If the parties did not agree, the sponsor’s suit must include all the patents on the Paragraph 5 lists.
Another section of the statute provides that the applicant must give the sponsor 180 days advance notice of its intention to begin commercial marketing of the biosimilar. Between its receipt of the notice and the expiration of the 180 days, the sponsor can seek a preliminary injunction against sales of the applicant’s biosimilar based on any patent that (1) was included on a Paragraph 3 list but (2) was not included on either an agreed list of patents for litigation or a Paragraph 5 list (or, under another section of the statute, based on a patent that issued or was licensed after the sponsor created its Paragraph 3 list).

Factual and Procedural Background

The underlying case arose out of Sandoz’s application for approval of a biosimilar to Amgen’s NEUPOGEN® (filgrastim), a granulocyte colony stimulating factor (GCSF) protein. In July, 2014, Sandoz became the first company to have FDA accept an application for a biosimilar. FDA’s acceptance of Sandoz’s application should have cued the music for the patent dance to begin, but instead Sandoz left Amgen on the sidelines. According to Amgen’s Complaint, Sandoz “opted not to provide Amgen with Sandoz’s biosimilar application within 20 days of FDA’s notification of acceptance.” Amgen further alleged that, in a subsequent letter, Sandoz wrote that Amgen’s “next step under the BPCIA can only be starting a declaratory judgment action as specified in that statute.”

Amgen alleged a variety of harms from Sandoz’s conduct and sought several remedies. Amgen’s first claim was for an alleged violation of California’s unfair competition statute. Amgen alleged that the violation deprived it of information it would receive under the BPCIA’s provisions and the right to seek a preliminary injunction. Amgen also alleged several economic injuries, including the cost of monitoring and responding to Sandoz’s actions, and lost profits and increased costs if Sandoz was allowed to market its competing biosimilar. Amgen’s second claim was for conversion. Amgen alleged that its BLA for
NEUPOGEN® is property and Sandoz was converting that property by basing the biosimilar application on the BLA without Amgen’s permission and without complying with the BPCIA litigation provisions. Amgen alleged that the conversion diminished the value of the BLA and that it would also suffer lost sales and market share. Amgen sought to recover the costs of monitoring and responding to Sandoz’s actions. Amgen alleged Sandoz’s actions were oppressive and malicious and sought punitive damages. Amgen’s third and final claim was for infringement of U.S. Patent No. 6,162,427, titled “Combination of G-CSF With a Chemotherapeutic Agent for Stem Cell Mobilization.” Amgen sought an injunction restoring the benefits it would have received under the BPCIA litigation provisions and against the manufacturing of Sandoz’s biosimilar.

Supreme Court’s Decision

The Supreme Court’s decision involved two of the steps in the patent dance, (1) turning over the application and manufacturing information and (2) providing the notice of commercial marketing. First, the Court addressed “whether the requirement that an applicant provide its application and manufacturing information to the manufacturer of the biologic is enforceable by injunction” and concluded that “an injunction is not available under federal law.”3 The Court remanded to the Federal Circuit to decide whether an injunction is available under state law. Second, the Court considered “whether the applicant must give notice [of commercial marketing] to the manufacturer after, rather than before, obtaining a license from FDA for its biosimilar” and held that “an applicant may provide notice before obtaining a license.”4

With respect to the availability of an injunction to enforce the provision for turning over the application and manufacturing information, the Court wrote that a specific provision of 42 U.S.C. § 262, § 262(l)(9)(C), provides a remedy for an applicant’s failure to turn over its application and manufacturing information. That subsection authorizes the sponsor, but not the applicant, to bring an immediate declaratory judgment action for artificial infringement as defined in 35 U.S.C. § 271(e)(2)(C)(ii). The Court held, “The remedy provided by § 262(l)(9)(C) excludes all other federal remedies, including injunctive relief,”5 reasoning that where “a statute expressly provides a remedy, courts must be especially reluctant to provide additional remedies.”6 Because Congress expressly provided the declaratory judgment remedy, and did not expressly provide an injunctive remedy, the Court inferred that Congress did not intend to authorize an injunction, at least as a matter of federal law, to enforce the disclosure requirement.

On the second issue, the Court held that the language of the BPCIA allowed the biosimilar applicant to give the notice of commercial marketing before its biosimilar was approved, i.e., licensed, by FDA. The statute provides that the applicant must give “notice” at least 180 days “before the date of the first commercial marketing” and the “commercial marketing,” in turn, must be “of the biological product licensed under subsection (k).”7 The Court reasoned that because “of the biological product licensed under subsection (k)” modifies “commercial marketing” rather than “notice,” the time of commercial marketing is when the biosimilar must be licensed. The Court found that the BPCIA’s use of the word “licensed” merely reflects the fact that, on the date of the first commercial marketing, the product must be licensed. Accordingly, the applicant may provide notice either before or after receiving FDA approval.8

Federal Circuit’s Decision

As noted above, the Supreme Court remanded the case to the Federal Circuit to decide in the first instance if Amgen could obtain an injunction to enforce the disclosure requirement based on one of its state law claims. The Federal Circuit held that “Sandoz did not forfeit its preemption defense and the BPCIA preempts state law remedies for an applicant’s failure to comply with § 262(l)(2)(A).” After first deciding it would apply its own law to decide the question, 9 the court affirmed the district court’s dismissal of Amgen’s state law claims.10 On the merits of the preemption issue, the Federal Circuit noted that there are
three types: express, field, and conflict. Because the BPCIA does not expressly preempt state law remedies, the court turned to field and conflict preemption. Under field preemption, “state law is pre-empted where it regulates conduct in a field that Congress intended the Federal Government to occupy exclusively.”11 Conflict preemption exists “where it is impossible for a private party to comply with both state and federal requirements, or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”12 The court concluded that both field and conflict preemption barred Amgen’s state law claims.

As to field preemption, the court began by noting that patents are “inherently federal in character” because a patent “originates from, is governed by, and
terminates according to federal law.”13 Picking up on the Supreme Court’s comment that the BPCIA is a “carefully crafted and detailed enforcement scheme” and its holding that § 262(l)(9)(C) excludes all other federal remedies,14 the Federal Circuit concluded that the BPCIA’s “comprehensive, carefully calibrated ‘scheme of federal regulation . . . [is] so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it.’”15

Turning to conflict preemption, the court observed that Amgen’s attempt to enjoin Sandoz under state law to comply with the BPCIA’s disclosure requirements would impose a penalty unavailable under federal law. This result would present a “conflict in the method of enforcement” between the BPCIA and state law and thereby create “an obstacle to the regulatory system Congress chose.”16 The Federal Circuit (again taking a cue from the Supreme Court) concluded that where “Congress made a deliberate choice not to impose” certain penalties for noncompliance with federal law, state laws imposing those penalties “would interfere with the careful balance struck by Congress.”17 To avoid this conflict, the court found that Amgen’s state law claims were barred by conflict preemption as well.


At least one lesson from these cases is that things are not always as they seem. Starting from a statute that states a biosimilar applicant “shall provide” its
application and manufacturing information to the innovator, the law is now that providing the application and manufacturing information is optional and the innovator cannot obtain an injunction to require the information to be provided. The entire “carefully calibrated” Congressional scheme for patent litigation involving biosimilars can be bypassed from the very beginning at the option of the biosimilar applicant.

Lynn C. Tyler is a partner in the Indianapolis office of Barnes & Thornburg LLP and is the chair of the firm’s Food, Drug & Device Group.

  1. 137 S. Ct. 1664 (2017).
  2. See 42 U.S.C. § 262(l) (2017).
  3. 137 S. Ct. at 1669.
  4. Id.
  5. Id. at 1675.
  6. Id. (quoting Karahalios v. Federal Employees, 489 U. S. 527, 533, 109 S. Ct. 1282, 103 L. Ed. 2d 539 (1989)).
  7. Id. at 1677 (quoting § 262(l)(8)(A)).
  8. Id. (citing § 262(a)(1)(A)).
  9. Id. at 1325.
  10. Amgen, Inc. v. Sandoz Inc., 877 F.3d, 1315, 1320 (Fed. Cir. 2017).
  11. Id. (quoting English v. Gen. Elec. Co., 496 U.S. 72, 79 (1990)).
  12. Id.
  13. Id. (quoting Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341, 347 (2001)).
  14. 137 S. Ct. at 1375.
  15. Id. at 1328 (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)).
  16. Id. at (quoting Arizona v. United States, 567 U.S. 387, 405-06 (2012)).
  17. Id.